Equal Employment Opportunity Commission v. Freeman

126 F. Supp. 3d 560, 2015 U.S. Dist. LEXIS 118307, 99 Empl. Prac. Dec. (CCH) 45,408, 127 Fair Empl. Prac. Cas. (BNA) 1846
CourtDistrict Court, D. Maryland
DecidedSeptember 3, 2015
DocketCase No. RWT 09cv2573
StatusPublished
Cited by9 cases

This text of 126 F. Supp. 3d 560 (Equal Employment Opportunity Commission v. Freeman) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Equal Employment Opportunity Commission v. Freeman, 126 F. Supp. 3d 560, 2015 U.S. Dist. LEXIS 118307, 99 Empl. Prac. Dec. (CCH) 45,408, 127 Fair Empl. Prac. Cas. (BNA) 1846 (D. Md. 2015).

Opinion

MEMORANDUM OPINION

ROGER W. TITUS, District Judge.

World-renowned poker expert Kenny Rogers once sagely advised, “You’ve got to know when to hold 'em. Know when to fold ‘em. Know when to walk away.”1 In the Title VII context, the plaintiff who wishes to avoid paying a defendant’s attorneys’ fees must fold ‘em once its case becomes so groundless that continuing to litigate is unreasonable, i.e. once it is clear it cannot have a winning hand. In this case, once Defendant Freeman revealed the inexplicably shoddy work of the EEOC’s expert witness in its motion to exclude that expert, it was obvious Freeman held a royal flush, while the EEOC held nothing. Yet, instead of folding, the EEOC went all in and defended its expert through extensive briefing in this Court and on appeal. Like the unwise gambler, it did so at its peril. Because the EEOC [566]*566insisted on playing a hand it could not win, it is liable for Freeman’s reasonable attorneys’ fees.

BACKGROUND

I. Facts2

Freeman, as a regular part of its hiring process, conducted criminal background checks on all applicants who were offered a position, and conducted credit background checks on applicants who were offered financially sensitive positions.3 EEOC v. Freeman, 961 F.Supp.2d 783, 787 (D.Md.2013). Importantly, applicants were not turned away for any negative information. Rather, Freeman limited in scope the type of negative information that would disqualify an applicant. For example, as to the criminal background check, Freeman generally did not consider arrests, but only convictions that had occurred within the past seven years.4 Id. at 788. Furthermore, Freeman did not consider all convictions, but only those for certain crimes. Id. Similarly, with regard to credit checks, only certain negative items would exclude an applicant from being hired. Id. at 789. The Equal Employment Opportunity Commission (the “EEOC”) alleged that Freeman’s use of background checks was discriminatory. Id. at 790.

II. Procedural History

After being rejected by Freeman based on information in her credit report, Katrina Vaughn filed a charge of discrimination with the EEOC. Id. at 789. Based on this charge, the EEOC filed a complaint in this Court alleging that Freeman’s use of background checks had a disparate impact on African-American, Hispanic, and male job applicants. Id. On April 27, 2010, the Court dismissed all claims relating to hiring decisions made before March 23, 2007, the date 300 days before the original charge of discrimination was filed on January 17, 2008. ECF No. 19. On January 31, 2011, the Court granted Freeman’s partial motion for summary judgment and dismissed all claims relating to hiring decisions based on criminal background checks made prior to November 30, 2007, the date 300 days before September 25, 2008, when the EEOC first notified Freeman that it was expanding its investigation to include race discrimination based on the use of criminal background checks. ECF No. 43. On August 24, 2012, the EEOC voluntary dismissed with prejudice its claim that Freeman unlawfully discriminated against Hispanics.5 ECF No. 95.

On July 18, 2012, the EEOC served Freeman with the expert report of Dr. Kevin R. Murphy. ECF No. 186 at 9. After Freeman pointed out various errors in the report, the EEOC served a second expert report that purported to fix those errors on July 26, 2012.6 ECF No. 186— 17. On December 18, 2012, Freeman moved to exclude Dr. Murphy’s report and [567]*567the report of a second expert, Dr. Beth Huebner, arguing that a significant number of errors and omissions within the reports made them unreliable, and thus inadmissible.7 ECF No. 108. On December 21, 2012, Freeman moved for summary-judgment, arguing that, without reliable statistical evidence of a disparate impact, the EEOC could not make out a prima facie case of discrimination. ECF No. 114. The EEOC responded to each motion. ECF Nos. 121, 126. In its opposition to the motion to exclude the expert reports, the EEOC submitted a supplemental expert report from Murphy that purported to moot Freeman’s criticisms. ECF No. 121 at 7. The EEOC also contended that Freeman was the source of any errors in the expert report. Id. at 13. The EEOC also proffered yet another report by Murphy at the motions hearing on June 19, 2013. Freeman, 961 F.Supp.2d at 797.

On August 9, 2013, the Court excluded the EEOC’s experts and granted Freeman’s motion for summary judgment. ECF No. 150. Freeman subsequently moved for attorneys’ fees. ECF No. 154. After filing its appeal, ECF No. 166, the EEOC moved to stay proceedings related to Freeman’s motion for attorneys’ fees. ECF No. 172. The Court granted that motion over Freeman’s opposition. ECF No. 176. The EEOC also moved to amend the record for appeal with Murphy’s report tendered at the motions hearing, ECF No. 177, and the Court granted that motion, again over Freeman’s opposition. ECF No. 181.

The Fourth Circuit affirmed the Court on February 20, 2015. EEOC v. Freeman, 778 F.3d 463 (4th Cir.2015). Freeman submitted a renewed motion for attorneys’ fees that included those fees incurred on appeal, ECF No. 186, and has further supplemented its request to account for fees incurred defending its fee request. ECF No. 197.

ANALYSIS

The EEOC has, understandably, taken a keen interest in employers’ use of background checks to make hiring decisions.8 “Because of the higher rate of incarceration of African-Americans than Caucasians, indiscriminate use of criminal history information might have the predictable result of excluding African-Americans at a higher rate than Caucasians.” Freeman, 961 F.Supp.2d at 786. Similarly, because blacks typically fare worse in many indicators of economic health, such as income and poverty rate, than whites, credit checks may disproportionately exclude blacks. The EEOC is certainly entitled to attempt to police the use of background checks through litigation, and to attempt to use litigation to challenge whether an employer’s use of background checks is “job-related for the position in question and consistent with business necessity.” Id. at 791.

However, before the EEOC can get to the question of business necessity, it must actually make out a prima facie case of disparate impact, and before it can make out a prima facie case of disparate impact, it must actually produce reliable statistical evidence showing that a particular employment practice has a disparate impact on a protected class. Id. at 791. The EEOC is not entitled to require an [568]*568employer to demonstrate business necessity when it is consistently unable to produce any reliable evidence of a disparate, impact. See EEOC v. Propak Logistics, Inc., 746 F.3d 145, 157 (4th Cir.2014) (“The reference to statutory goals and missions, however, cannot be divorced from the manner in which those purposes are implemented.”) (Wilkinson, J., concurring).

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126 F. Supp. 3d 560, 2015 U.S. Dist. LEXIS 118307, 99 Empl. Prac. Dec. (CCH) 45,408, 127 Fair Empl. Prac. Cas. (BNA) 1846, Counsel Stack Legal Research, https://law.counselstack.com/opinion/equal-employment-opportunity-commission-v-freeman-mdd-2015.